With the Maryland General Assembly now in the final month of the 2017 legislative session which ends on April 10, several bills regarding community associations are still under consideration. Other bills have died in committee. A bill must be passed by the Maryland House and Senate and signed by the Governor in order to become law.

Here’s What’s HOT!

State Registration of Community Associations. Legislation to require each condo, co-op and HOA to register with the state has been passed by the House after it was amended to limit the information required. For communities which already register with the county, no additional state registration would be required. The bill is now under review in the Senate.

Manager Licensing. A bill to require community managers to obtain a State license has been introduced again this year. Manager licensing legislation was previously considered in 2014 and is under study again in the House of Delegates. The proposed legislation would require a manager to have specified training, pass a test and pay a license fee in order to provide management services to condos, coops and HOAs.

Replacement Reserves for Capital Expenditures. Every five years, each condominium and homeowners association would be required to obtain a study of the estimated costs to repair and replacement of building structural components, roads, recreation facilities and other similar items. The House has passed this legislation which is now under review in the Senate.

Foreclosure Sale Notice. A lender which sells a property at foreclosure would be required to give written notice of the proposed sale to any condo or HOA which has recorded an assessment lien against the property at least 30 days before the sale date. Notice of any postponement or cancellation of the foreclosure sale must also be provided to the property owner, condo and HOA. This legislation has passed both the House and Senate.

Governing Documents. Still under study are bills to make it easier to amend condo and HOA governing documents and to invalidate condo document provisions which limit the time for bringing condominium legal claims regarding construction defects.

Here’s What’s NOT

Electric Vehicle Charging Stations. A bill to invalidate condominium and homeowner association covenants which prohibit or unreasonably restrict the installation electric vehicle charging stations in parking spaces designated for the exclusive use of a homeowner was killed by House and Senate committees.

Backyard Gardens. Also killed in committee was a bill to invalidate association covenants which prohibited gardens in the backyard of a home.

Smoking Restrictions. Legislation to allow the board of directors of a condominium or homeowners association to adopt rules to prohibit tobacco smoking in an owner’s condo or townhome was voted down in committee.

For updates and details on legislation affecting Maryland condos, co-ops and homeowner associations, sign up for the Maryland Condominium &HOA Law Blog to receive the latest blogposts by email.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations and housing cooperatives in Maryland–including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore County; and in Washington, D.C.

Outside the glare of worldwide attention to the inauguration of Donald Trump as the President of the United States, the Maryland General Assembly began its 2017 90-day legislative session in mid-January.

Some bills considered–but not enacted–in 2016 will be examined again by legislative committees in the Maryland House of Delegates and Maryland Senate. This includes legislation to establish a state registry for common ownership communities, to require lender notice to condominiums and homeowner associations when a lender postpones or cancels a foreclosure sale, and to make it easier to amend the governing documents of condominiums and homeowner associations.

Other proposed legislation would require Maryland community association managers to obtain a state license to provide management services and establish a State Board of Common Ownership Community Managers. Several bills would limit the authority to prohibit or regulate uses such as electric vehicle charging stations and backyard gardens. Also under consideration is a bill to require condos and HOAs to obtain an independent reserve study of the condition of the common areas every 5 years to determine future costs of major repairs and replacement.

A legislative committee will receive comments on each bill and make a recommendation on whether the bill should become law. Only legislation which is passed by both the House and Senate, and approved by the Governor becomes law.

For updates and details on legislation affecting Maryland condos, co-ops and homeowner associations, sign up for the Maryland Condominium &HOA Law Blog to receive the latest blogposts by email.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations and housing cooperatives in Maryland–including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore County; and in Washington, D.C.

New resale disclosure requirements for Maryland condominiums and homeowner associations apply beginning October 1, 2016. Condos will now be required to provide prospective purchasers with the current reserve study report or a summary of the report, and a statement of the status and amount of any reserve or replacement fund. There are also changes regarding disclosure of unsatisfied judgments against the condominium and pending lawsuits to which the condominium is a party.

Condo Resales. The condo resale disclosure information will no longer require a statement as to whether the association has knowledge of an alteration or improvement to the unit or limited common elements assigned to the unit are in violation of the bylaws or rules. And, the required statement about common element health or building code violations will be limited to actual knowledge of such violations.

The fees which a condominium may charge for providing the resale disclosure certificate and condo documents is capped at $250 plus additional fees up to $100 to inspect the unit and rush fees up to $100.

HOA Resales. Additionally, Maryland homeowner associations for the first time will be required to provide information and documents to owners when they sell their property. This includes information about the total amount of assessments and fees charged by the association; whether any of the assessments or fees are delinquent; the contact information for the associations of its management agent; unsatisfied court judgements; and pending claims, covenant violation actions or notices of default against to property.

A homeowners association may charge up to $250 for the resale disclosure information and HOA documents plus rush fees of up to $100.

The Maryland legislature has passed legislation which affects the management and operation of condominiums and homeowner associations. New laws which take effect October 1, 2016 include:

Resale Disclosures. Homeowner associations will be required for the first time to provide resale disclosure information to an owner selling a home in an HOA. For condos which have long been required to provide resale disclosures, the disclosure requirements have been clarified or changed on matters such as assessments, replacement reserves, pending litigation, unit alterations, and violations of health or building codes. And, the amount which condos, HOAs and management companies may charge for providing resale disclosure information is capped by the new law.

Tax Sale Procedure. The purchaser of property at a tax sale will be required to notify condos and HOAs when a court suit is filed to prevent owners of property in those communities from keeping ownership of property. The new law also provides that when a tax sale is approved by the court, the tax sale purchaser is responsible for payment of condominium and homeowner association assessments from the date of the court judgment, whether or not a tax sale deed to the property is recorded in the land records.

Assessment Collection. A court suit will not be permitted for any unpaid assessments where the time for filing suit has expired. Any subsequent payment on the debt, or written or oral affirmation of the debt will not revive or extend the statute of limitations. This applies to all suits involving consumer debt, not just association assessments.

Home Gambling. Card games and mah jong games hosted in a residence not more than once a week will now be allowed where the total gambling bets for all players is no more than $1,000 in a 24-hour period. In senior communities with age 55 restrictions, these games will also be allowed in the common areas.

Legislation considered but not enacted would have required state registration of all condos, co-ops and HOAs, and would have made it easier to amend association governing documents by allowing an owner’s failure to vote on a proposed amendment to be counted as that owner’s approval of the proposed amendment.

Also rejected was a bill to prohibit provisions in condominium sales contracts and bylaws which limit the ability of condo associations to file suit to enforce construction warranties on the common elements.

As the Maryland General Assembly heads to the end of the 2016 session on April 11, some bills regarding community association governance are still under consideration. Others have been killed in committee. To become law, a bill must be passed by the Maryland House and Senate and signed by the Governor.

Here’s What’s HOT!

Resale Disclosures. A bill to cap the amount which an association or management company can charge for providing resale disclosure information has passed the House and is headed to the Senate. If enacted, it would also create a new obligation for homeowners associations to provide resale disclosure information to an owner selling a home in an HOA.

Annual State Registration. Legislation to require each condo, co-op and HOA to register with the state was passed by the House after it was scaled back to limit the information required.

Foreclosure and Tax Sale Notices. Where condos and HOAs have recorded assessment liens, a bill passed by the House would require lenders to notify the association of any proposed, postponed or canceled foreclosure sale. Another bill passed by the House and Senate would require tax sale purchasers to notify condos and HOAs when a court suit is filed to prevent owners of property in those communities from retaining ownership of property purchased at a tax sale.

….and Here’s What’s NOT!

Condo Construction Warranty. House and Senate committees rejected proposed changes in the Maryland Condominium Act to prohibit provisions in condo sales contracts and bylaws which limit the ability of condo associations to file suit to enforce construction warranties.

Amendment of Governing Documents. A House committee also killed legislation to make it easier to amend the governing documents of condos and HOAs by allowing an owner’s failure to vote on a proposed amendment to be counted as that owner’s approval of the proposed amendment.

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The Thomas Schild Law Group provides legal services to community associations – condominiums, homeowners associations, and cooperatives – in Maryland and the District of Columbia. We also represent property owners regarding contract review, business disputes, and debt collection.

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